Gujarat Solar Power Policy, 2021

On December 29, 2020, the Gujarat government announced the new solar power policy, 2021. According to the policy any developer or person or industry can set up a solar project in Gujarat. The policy mainly aims to reduce the power cost of industrial units by around 50%. This is to be achieved by removing capacity ceiling for setting up a solar project in Gujarat.

Key features of the policy

  • The policy allows the power consumers to set up solar projects on the roof top and backyards. The consumers can also offer their space to the third parties for power generation and utilisation.
  • The security deposit provided to the power companies has been reduced to five lakh rupees per megawatt. Earlier it was twenty-five lakh rupees per megawatt.
  • The policy aims to increase the presence of “Made in Gujarat” brand in global market.
  • The policy allows a group of consumers to set up solar projects as a collective ownership project for self-consumption.
  • In order to encourage small scale solar projects, power discoms, the new policy is to purchase power at 20 paise per unit from them. The small-scale solar projects are those projects that produce power up to 4 megawatts.
  • Under the policy the state government will purchase the surplus power. The surplus power limit is to be set by the project proprietor. For MSMEs and residential consumers the state government of Gujarat is to purchase a surplus Tower at 2.2 5 rupees per unit.


The state of Gujarat has already achieved 11,000 megawatts of production capacity in green energy. Currently the state has set a target of producing 30,000 megawatts of Clean Energy by 2022. This is to largely include solar energy and wind energy.

Way Forward

The policy is to bring down the power cost from 8 rupees per unit to around 4.50 rupees per unit. Also, the policy is expected to reduce the production cost of solar energy. This in turn will help the state manufacturers to emerge Global competitors.




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